running, adding to hopes that Bermuda might be pulling out of the recession.

With new retail sales volume figures showing the first monthly increase, compared with the same month the previous year, in more than two and a half years and tourist arrival figures improving, there is growing optimism among local business people.

Mr. Bill Dolan, chairman of the Bermuda Exchange, said he was "delighted'' with yesterday's Exchange Index jump of 32.40 to 897.40.

Excluding last week, the highest Index prior to this was 858, prior to the worldwide stock market crash of October, 1987.

Mr. Dolan predicted at the beginning of the year that local stocks offered investors great opportunities to make money.

And he has been borne out by sharp gains in the shares of many local firms this year.

"People are more confident about the economy and are less nervous about investing their money,'' said Mr. Dolan.

A combination of reasons were responsible for the current strength of the Exchange, said Mr. Dolan, the Bank of Bermuda's manager of private banking/investments.

People, worried about what the future might hold, had increased their savings in local banks and deposit companies as a result of the recession.

Now there is widespread belief that the recession could be about to end, investors were becoming more confident in local companies.

They have been further encouraged to place their money in stocks by a significant drop in interest rates at savings institutions, offering investors a lower rate on their investment.

High dividend returns being paid out by several companies listed on the Bermuda Exchange, which tends to be yield-driven, have proven particularly attractive, said Mr. Dolan.

"With a drop in interest rates, people see they can get better returns elsewhere,'' he added.

"They are now looking for conservative places to put their money and so volume has increased on the Exchange.

"People feel comfortable with the local market. They particularly like the banks and the utilities companies.'' This last comment was only too evident yesterday, with large gains in the shares of the Bank of Bermuda, Bank of N.T. Butterfield, Bermuda Telephone Company and Bermuda Electric Light Company.

The Bank of Bermuda alone accounted for almost half ($390,615) of the $826,097 total value of stocks and bonds traded yesterday -- the highest total value in ten months.

The Bank's eight percent preference stock was also up, by 25 cents, to $12.50, with a volume of 169.

Anyone who invested a large sum of money in the Bank of Butterfield at the beginning of the year for its then price of $13.75 will be laughing now.

Butterfield's stock went up again yesterday, by $1.50 to $24, meaning that its shares have increased in value by a whopping 74.5 percent during 1992.

Telco stock jumped by $1 to $29.50, with a volume of 8,271, while Belco shares rose by 25 cents, with a volume of 8,230.

Elsewhere, Argus Insurance was up by 50 cents to $11, with a volume of 2,130.

The only fall on the Exchange was in the stock of Bermuda Fire and Marine Insurance run-off firm, which dropped from 25 cents per share to ten cents, with a volume of 2,300.

The Bank of Bermuda yesterday issued a 25 cent dividend, bringing its total for the year to $2. Bermuda Computer Services issued a 20 cent dividend, bringing its total to $1.80.

Stevedoring Services shareholders received a three cent dividend, for a total of six cents this year. Bermuda Electric Light Company issued a 25 cent for a total of 75 cents this year.